Now is an excellent time to look into agricultural investment opportunities. While farmland has always been valuable, now is especially a good time to get involved with farm investment companies. There has never been a global population boom like what is going on now. Yet, at the same time, there isn’t as much quality farmland left due to climate change, farmers going through financial struggles, and so forth.
There are many opportunities to invest in farmland as well. You don’t have to buy your own farm. You can lease out the property to farmers, become a partial owner of a farm, invest in commodities such as crops, invest in agricultural mutual funds or index funds, and so forth.
Farmland has consistently outperformed other types of asset classes throughout history. Agricultural returns have been positive every year for decades. While no investment is entirely risk-free, farmland stands out as a real asset since performance does not correlate with stocks or bonds. Its volatility has always been low. It is a real asset that produces essential commodities. Without it, there would be widespread famine.
As mentioned above, there are various ways you can get involved with investment companies. These days, some companies offer crowdfunding platforms and an option to become a sole owner, but without doing the hard work yourself. The latter typically requires that you put up much money – as much as a million or so in equity per farm.
Farm Investment Companies are not Only for Accredited Investors
The crowdfunding option is much cheaper, although you might still need to qualify as an accredited investor who meets the SEC’s Accredited Investor terms. This definition means that you will have to have a net worth of greater than $1,000,000 (either individually or jointly), earn $200,000+ annually (for at least two years) individually or $300,000 per household, and so forth.
What kinds of farms should you invest in? If you want to invest through a platform, make sure the organization you choose is upfront about the types of farms and crops it tends to focus on. The best farm investment companies will focus on locations with high-grade soils, substantial water availability, and the production of crops that are in high demand.
Always research any farm you are interested in. Is it located in a geographical area known for its fertile farmland and history of profitable agriculture?
Since there are so many farm and agricultural-related stocks, mutual funds, index funds, and other investment opportunities out there, how do you know where to begin? Which farm investment companies should you look into? FarmTogether is a great place to start if you are an accredited investor. Even if you aren’t, the platform is actively researching ways that will allow it to open up some investment offerings to every potential investor, regardless of status.